[Viewpoint]Taking on Nonghyup

President Lee Myung-bak is casting a line, and his catch is the reform of the National Agricultural Cooperative Federation. He has criticized the agricultural co-op for making trillions of won through its financial arm while farmers suffer and some co-op executives pursue political and career interests.

The history of corruption at the agricultural cooperative is a public enemy. President Lee’s predecessors have tried to eradicate this plague. They all baited the hook, but the co-op fiercely resisted each time. Nonghyup resisted reform, and they all gave up in the end.

The agricultural cooperative, known as Nonghyup, epitomizes the abuse of democracy. The Nonghyup chairman is directly elected by the leaders of local co-ops. Regional heads are also selected through elections by 2.4 million co-op members in 1,196 branches.

The direct election system was adopted in 1988, when the whole nation was moving toward free and fair elections. The justification for direct elections was powerful. It represented the desire of the co-op and farmers to work together.

However, there have been serious problems. The direct elections often turn into popularity contests rather than choosing the most appropriate candidate. Candidates focus on taking sides with the powerful and hunting for concessions. Some branch head elections have been influenced by money. Chairmen chosen through direct elections have a four-year term and brandish unchallenged power.

The three former chairmen chosen through direct elections have all been arrested for corruption. The current allegations regarding the acquisition of Sejong Securities is a familiar development. Since direct elections began, inefficiency and corruption have revealed a darker side of democracy. The problems associated with the direct elections of university presidents and education superintendents are similar to the vices hounding Nonghyup.

The co-op also represents hypocrisy. In our society, a view of farmers as the bedrock of the world still carries a lot of influence. Citizens worry about farmers when the country is hit by a typhoon or a drought. Farmers have the power to dominate public discussions. And Nonghyup monopolizes this sentiment and enjoys various benefits. It keeps a large portion of municipal and national funds for itself. Its business is easy and fail-proof.

The Blue House decided to house a bank branch at the Bugak Complaints Office, and banks competed to open their branches there. Nong-hyup advocated “communication with farmers,” and the Blue House bought the line. Last month, the Blue House chose Nonghyup over Woori Bank, making it the first bank in the heart of power.

However, Nonghyup did not share the fruits of the deal with farmers. As President Lee Myung-bak has pointed out, the co-op made tremendous amounts of money but turned its back on farmers. It betrayed public sentiment and acted hypocritically. The co-op concentrated on improving the welfare of its employees and executives. People think working for Nonghyup is a “career from God.”

Corruption and irregular practices have spread to entry-level employees as well, and farmers are furious.

“You don’t have to say you are working for farmers. Make sure you reform the agricultural co-op. Then the president will be considered successful at least in agricultural policy,” President Lee harshly condemned Nonghyup when he visited Garak Market. He was moved by an old woman’s tears, which represented the suffering of farmers.

The co-op presented reform measures, and some of its executives resigned. However, they failed to win the trust of citizens because they missed the point. The key of reform should be reducing the chairman’s excessive authority.

Chairman Choi Won-byung, the co-op’s fourth head, is a graduate of Dongji Commercial High School in Pohang, from which Lee Myung-bak graduated, five years ahead of him. Therefore, critics say, reducing the chairman’s authority might not come easily. The government’s Agricultural Co-op Reform Plan issued last month does not have a clause restricting the chairman’s right to make appointments.

President Lee’s criticism was unprecedented. It was unreserved and official. Therefore, if his reform efforts are not satisfactory, they will come back to him like a boomerang. His authority will be damaged.

President Lee has stepped into the ring of national administrative reform. Nonghyup is a dinosaur, riddled with systemic corruption, slack management, excessive bureaucracy and moral hazard.

Its leaders are trained in survival. They are good at colluding with the lawmakers and cooperating with civil servants. Ironically, this challenge makes reforming Nonghyup more attractive. If successful, the reform will have a great impact. The public sector’s competitiveness will be enhanced, and the cycle of corruption can be broken. It is worth gambling the fate of the administration.

The financial crisis provides a decisive opportunity for reform. It is time to eradicate excess and hypocrisy. If we are to overcome the economic slump, the government should prepare a plan that benefits all citizens. The corruption at the agricultural co-op is an obstacle to accomplishing this.

If the president wants to wipe tears from the faces of farmers, the government should quickly pass a bill to reform Nonghyup.

President Lee Myung-bak should make this the hallmark of his administration.

*The writer is a senior columnist of the JoongAng Ilbo.

by Park Bo-gyoon